Unsexy, Very Important

I’m a huge supporter of infrastructure spending – both for the multiple economic benefits of large-scale infrastructure projects and the more mundane reason that the things you build are good to have: roads, modern rail systems, airports, bridges that don’t collapse, modern energy infrastructure. The list is almost endless. This makes a lot of people excited about Donald Trump’s push for infrastructure spending. But put on the brakes and don’t get excited. As I mentioned a few days ago, Trump isn’t proposing major spending on infrastructure projects. He’s proposing ‘public private partnerships’, which as we explained here are in most cases efficient ways to sell off public goods to private corporations.

But it’s actually even worse than that.

There are two really good short articles out today which begin to explain what’s happening. There won’t be any infrastructure spending. There will be a mix of tax giveaways and and corporate welfare to incentivize private sector infrastructure spending. And there is good reason to think that most of those giveaways will simply be pocketed for spending that was already happening. In other words, big giveaways, more budget busting without even getting the benefit of new stuff or spurring demand.

Start with Ron Klain’s article here in The Washington Post and Paul Krugman’s in The New York Times here. This is a mix of privatization and tax giveaways which in all likelihood will not even lead to building much of any new stuff.